Tag Archives: BEAD Grants

New BEAD – Much Ado About Nothing

In my opinion, the BEAD grant program has been a rolling disaster since it was introduced. We saw how a good grant program works when the Capital Project Fund program operated by Treasury quickly dispersed infrastructure money and put it to use. Both programs were authorized around the same time, yet most of the projects funded by CPF are completed, or will be soon since a few projects got an extension until next June.

By contrast, BEAD construction has barely started. There are numerous reasons for BEAD delays, with the most recent delay when NTIA lost a year when it switched to the Benefit of the Bargain rules that drastically halved the funding awarded for infrastructure.

One of the original elements of the BEAD legislation was that money that wasn’t spent on infrastructure would be rolled into what the legislation termed non-deployment funds, which were intended to support broadband functions that supplemented and aided broadband. Many states expected to spend most or all of their BEAD funding on infrastructure, but after the Benefit of the Bargain, there is now over $21 billion of non-deployment. NTIA has been promising for the last year that it would issue guidance to states on when and how that funding can be used. NTIA held listening sessions earlier this year and asked for public input about how to best use the non-deployment funds.

To the surprise of nobody who has been following the BEAD trainwreck, NTIA pulled a fast one with the non-deployment funds. Rather than giving guidance on the $21 billion of non-deployment funds, NTIA has instead determined that some tiny portion of the non-deployment funds can now be used to build more infrastructure. That sounds really good on paper, because who’s not in favor of building more infrastructure?

As you might expect, because this is BEAD, the new grant process is complicated. First, NTIA is developing a list of eligible locations for the new funding. Some of these will come from ISPs that have already refused to accept the first round of BEAD. But it’s hard to think NTIA will find many other meaningful unserved locations. The agency has already claimed victory several times over the last year, saying that BEAD has basically solved the rural broadband gap – so NTIA doesn’t believe there are any pockets of locations that were missed by the original BEAD.

Once the list of locations is published, there is a tight time frame for states to deal with the new BEAD round. States will have 30 days to validate the locations. Next, each state would have to hold another quick map challenge process. As a reminder, the map change process was probably the most dysfunctional part of the original BEAD process – anybody who took part in the map challenges knows it was a disaster, end to end. After the map challenge, states have to submit their final locations to NTIA for approval, after which the states can hold a 90-day supplemental bidding round. I’m sure that NTIA will want to review tentative awards before they are made. States will then have to contract with grant recipients for the new awards. That likely means modifying existing BEAD lines of credit, and who knows what else. It’s hard to see this entire process playing out in less than a year, particularly since there are several steps that include an NTIA review and approval. It’s hard to see any of this new BEAD money being freed to ISPs until sometime into 2028.

All of this is a very convenient delaying tactic for NTIA, since it takes NTIA off the hook for providing guidance for the bulk of the non-deployment funds until the new infrastructure spending has been completely resolved through signing contracts with grant winners.

There is another little twist to consider in that infrastructure awards will be made at the average cost per location from the first round of BEAD. By definition, since all states have made awards for satellite broadband, the new BEAD average award will be lower than what was originally awarded for fiber. Add to this the fact that inflation has made it more expensive to deploy any terrestrial broadband technology, and I doubt that many fiber ISPs will be willing to take new awards a year from now at lower levels than the Benefit of the Bargain grants.

I titled this blog Much Ado About Nothing, because that’s what I expect out of it. I have a hard time seeing any meaningful numbers of locations getting infrastructure in the process, meaning only a small fraction of the non-deployment funds will be used in this process.

I’m hoping this will be my last blog on BEAD, because the process has grown too obtuse to keep writing about. This seems like a scheme for NTIA to delay any discussion about using the $21 billion of non-deployment savings for several more years. I expect most ISPs to ignore this new process, but states are going to be obligated to try to make the awards to somebody. Wouldn’t it be ironic if this ends up making new grants to the satellite providers at a much higher amount per location than what they accepted with the original BEAD? My inner conspiracy voice wonders if that’s the real intention of the new rules.

Where Are the Missing BEAD Locations?

It seems that almost everybody I’ve talked to in the last week is wondering what NTIA is up to when the agency said that non-deployment funds can be used to serve locations missed by the first round of BEAD grants. The common question I’m being asked is where NTIA and State Broadband Offices are going to find more BEAD-eligible locations. It’s a great question.

I can only think of three sources of locations for that were missed by BEAD the first time around. One group of locations are the ones being turned back to State Broadband Offices when BEAD awardees decide not to accept a BEAD grant. The broadband offices have been trying to find other ISPs to take these locations at the original award price. But I already know of several examples where there are no takers – at least at the dollar level of BEAD that was awarded after the Benefit of the Bargain round. Perhaps NTIA will loosen the purse strings a bit to allow for higher awards for some of these locations. I’ve also hear speculation that unclaimed BEAD locations will all go to satellite.

This option is risky for NTIA. The first time an offer is made to a new ISP that is higher than the original award, ISPs everywhere are going to be clamoring for more money. One of the cooperative associations recently made that request. I can foresee lawsuits arising if NTIA allows increases in funding for some locations but not others.

Another potential source of locations comes from each update of the FCC mapping fabric, when new locations are added to the FCC map. Some of these are new construction, and others are corrections of the fabric. I can’t imagine that is a whole lot of places in this category, but there are always going to be some with each new map. What’s not being talked about is that with every release of a new fabric, there are also locations that are being removed from BEAD. NTIA is quietly whittling away at the BEAD grants that have already been awarded, and almost everybody I know with a BEAD grant is seeing some reduction in eligible BEAD locations.

The only other source of new BEAD locations I can think of would be from fixing the many errors introduced in the BEAD map challenge process. The only word I can use to describe the map challenge process is ludicrous. NTIA created a set of rules to challenge the BEAD maps that were impossible to comply with. I know counties, cooperatives, and other ISPs that made numerous claims to the map challenge that were denied. Many of these challenges tried to add legitimate locations that were missing from the fabric.

A much larger number of challenges tried to add locations where an ISP was falsely claiming speed capabilities of 100/20 Mbps or faster that were overstated. A successful speed challenge required a local government to find actual customers of suspect ISPs and get them to take a complicated series of speed tests at defined times and intervals. That whole process was largely unachievable, particularly when the map challenge process was rushed through. In my opinion, the folks who designed the map challenge rules were either completely out of touch with the real world, or else the process was rigged on purpose to hold down the number of BEAD-eligible locations. I’ve seen some credible estimates that there are at least a million locations that were incorrectly thrown off the BEAD map. My own back-of-the-envelope estimate, which is admittedly based only on work in about twenty counties, is that this could be more than two million locations.

I can’t imagine a process where NTIA reopens the map challenge with challenge rules that work. I could see that process dragging out for a year.

There is an easier way to do a map challenge, which would be for NTIA to buy the entire Ookla speed test database of actual speed tests and compare it against ISP speed claims in the fabric. I’ve already written a future blog about how that might work. But I suspect this would lead to lawsuits and chaos as ISPs fight to not get overbuilt with BEAD grant funding.

My gut reaction when I heard this announcement is that won’t amount to a hill of beans. I talked to several people who think this announcement is just another way for the NTIA to put off the announcement of how they will spend the remaining $22 billion in nondeployment funds. NTIA had promised to make that announcement before the end of summer – which is next week. I sure hope this was not that announcement, because I don’t think there is any hidden stash of BEAD-eligible locations that will use more than a tiny amount of the nondeployment funds.

Walking Away from BEAD

NTIA has released all but four states to begin signing BEAD contracts with grant winners. Mississippi and Oklahoma have gotten final approval by NTIA but are waiting for approval from NIST. NTIA has still not approved the grant proposals from California and Illinois.

Now that the process of negotiating contracts for grant winners has started, news is seeping out of some grant winners backing out and refusing to accept the BEAD grant awards.

The largest BEAD award being rejected is by Astound in Texas, which is walking away from $166 million in grants. The company explained this by saying that it had only won five of the thirty-three project areas it had applied for, and that the remote geographic areas of the awards made no sense without winning more awards. I have to wonder if the company’s pending merger with Google Fiber also played a role in the company walking away. While it isn’t official, I’ve heard through the grapevine that Astound is also going to walk away from $112 million of BEAD grants in Oregon. The company has also tentatively won $100 million in Washington.

Another ISP walking away from a lot of awards is Resound Networks. Resound is walking away from $60.2 million in New Mexico, $23.1 million in Texas, $8 million in Kansas, $5.2 million in Arkansas, and $3.9 million in Colorado. The company also has relatively small grants in Arizona and Oklahoma. Resound is tentatively slated to win $34.4 million in California, which still has not been approved by NTIA.

There are three ISPs that haven’t signed grant contracts in Nebraska: Amazon, Northeast Nebraska Telephone Company, and Pinpoint Communications. I have to wonder what it means for a satellite company to not accept a grant, since the company has grant awards across the country.

There are bound to be other ISPs who will walk away that we haven’t yet heard about, since States have six months to get contracts from grant winners after the State signed a contract with NTIA for the BEAD money. I’ve been hearing about a lot of smaller ISPs that are still thinking about walking away from BEAD. Some will do so because the too-low grant funding means they can’t get a letter of credit.

It won’t be surprising if there are more rejections of BEAD. When NTIA initiated the Benefit of the Bargain rules, it significantly sliced the amount of grant funding per location. Many ISPs had said before Benefit of the Bargain that the long-term math for taking BEAD grants was marginal. That math took a big turn for the worse when NTIA forced the States to further lower the amount of grant awards. Any ISP that stays after the Benefit of the Bargain is accepting a smaller margin than they originally had hoped for.

At the same time that the amount of grant awards has been squeezed downward, ISPs are seeing inflation in the cost of fiber construction – inflation much higher than the rate of increase for the whole economy. The Fiber Broadband Association conducted a survey with members at the end of 2025 and asked about expected increases in construction costs for 2026. 88% of the respondents expected a cost increase for construction in 2026. 62% of respondents expected a ‘slight’ cost increase of less than 10%. 26% expect a cost increase of more than 10%. 9% expect costs to stay the same, and 3% expect costs to decrease by less than 10%.

It will be interesting to see how ISPs respond to this same question at the end of 2026. The industry is being pounded by increases in chip costs due to shortages as chip manufacturers have pivoted to building AI chips. Higher oil prices have affected the cost of shipping and operating work vehicles, and oil is a raw material component of things like fiber sheathing, conduit, and electronics housings. There is a lot of pressure this year from wage increases. The Federal Reserve made it clear last week that it will not be lowering interest rates this year and may have to instead increase them by year’s end.

We’re still seeing defaults six years after the initial RDOF awards, and I expect there will be ISPs that accept BEAD now but realize in a few years that they can’t make the math work.

I feel sorry for State Broadband Offices that are being asked to find replacements for ISPs that reject BEAD awards. It feels unlikely that NTIA will allow States to increase the size of the grant awards after a rejection. Every default could become a windfall for satellite companies, while a lot of communities are losing the chance to get fiber.

Proposed New Rules for Federal Grants

The Office of Management and Budget has proposed new rules for the Guidance of Federal Financial Assistance. These proposed rules would apply to a large percentage of federal grants awarded to States or directly to grantees. In the broadband world, the new rules would apply to grants made by the FCC, NTIA, U.S. Treasury, and the USDA. They would also apply to any secondary grants made through states, such as state broadband grants made using underlying federal funds. That means these rules impact BEAD, RDOF, ReConnect, Capital Project Fund grants, and the various NTIA broadband grants. The new rules would also apply to any payments made from federal programs to the public, which are not strictly considered as grants, such as E-Rate payments made to schools and libraries, and Lifeline payments made to reduce broadband bills.

This blog covers a few highlights of the proposed changes. For more details, see this comprehensive summary created by the Benton Institute. Comments on the proposed rules are due by July 13. The new rules are proposed to go into effect on October 1, 2026.

The new rules are intended to meet three objectives. This supposedly will improve transparency, accountability, and oversight. OMB says the changes will reduce recipient burden. Probably most importantly, OMB is taking charge of grants, and what the agency used to issue as guidance will now become binding regulation.

The following are some of the most important changes that could affect broadband:

  • One of the most consequential proposed changes is that the new rules expand the ability for federal agencies to cancel a grant mid-stream. This would apply to all discretionary grants (which are grants where a federal agency chooses the grant winners). There is a carve out and special rules for BEAD, for the CHIPs Act, and for block grants, formula grants, and disaster recovery grants. This is a huge change, because it means the federal government can stop a broadband infrastructure grant at any time – making it even riskier to take grant funding.
  • There would no longer be any fixed amount awards, and all grant expenditures have to be substantiated by invoices.
  • All grant recipients would have to participate in the E-Verify system, which would mean verifying the eligibility of employees and all subcontractors for receiving payments from federal funds. This new requirement also seems aligned with the new requirement that no grant funds can be used to reimburse payments to any person or company from a “covered” country, meaning countries on a list of countries that can be changed at any time.
  • The new rules completely eliminate any grant provisions that would promote DEI (diversity, equity, inclusion, and accessibility) based on race or sex.
  • Agencies and grant recipients will be expected to ensure that federal grant funds are not used to promote or support “theories of disparate-impact liability”. In plain English, that means grants can’t be used in a way that results in any discrimination by race, sex, or other protected characteristics. Grant recipients are also not to discriminate on the basis of “viewpoint, content, or subject matter of speech”, including political, ideological, or religious affiliation.
  • The new rules add a new layer of bureaucracy by requiring that every grant be approved by a senior political appointee. All grant awards are also expected to demonstrably advance the President’s policy priorities.
  • All else being equal, grants should be awarded to entities with the lowest indirect cost rates.
  • Pass-through entities (like a State Broadband Office) must ensure that grant recipients do not take actions that could damage the reputation of the grant pass-through agency or the federal government.

What are the practical results if these changes are implemented? While one stated goal is to reduce the burden on grant recipients, these changes would significantly increase paperwork. The proposed rules also increase the risk of accepting grant funding since a grant can be canceled at any time for violating the new political and social grant rules. Probably the most insidious proposed rules are that grant awards would have to pass several political sniff tests to be awarded, rather than being made on merit.

The big picture is that this is a clear attempt by OMB, which is part of the Executive branch, to take over the grant process. The vast majority of grants are created by federal legislation, and this would allow the executive branch to override grant rules created by Congress.

NTIA Trying to Regulate Through BEAD

NTIA has circulated guidance to BEAD winners titled BEAD Subgrantees: Protect Your Rights. Most of the two-page document is fairly routine stuff, but it also includes a bizarre section discussing permitting. The overall tenor of the document is odd in that it invites an ISP to directly contact NTIA if it thinks the contract offered by a State Broadband Office contradicts NTIA policy.

The document starts with a reminder that States can’t engage in ratemaking and demand specific rates in a BEAD contract. NTIA’s position on the issue is not controversial since rate regulation was prohibited in the original IIJA legislation that created BEAD. What is unusual is to see NTIA making a big deal out of this topic. My guess is that the NTIA guidance is mostly aimed at New York, where large ISPs that won BEAD are also subject to a state law that mandates a cap of $15 per month for qualifying low-income subscribers. Perhaps NTIA is hoping to goad one of the large ISPs in New York to use BEAD as a chance to challenge the state law, although the Supreme Court has twice refused to accept challenges to the legislation.

The guidance also alerts ISPs that each state is required to create a permitting roundtable where ISPs that encounter delays in permitting can discuss delays and fees. NTIA also seems to be reminding ISPs that States are required to document any problems encountered in implementing BEAD projects in semi-annual reports.

Where I think NTIA went off the rails is a set of requirements related to permitting:

  • NTIA wants a 90-day shot clock for the approval or rejection of permitting requests.
  • Grant winners can demand a single, dedicated point of contact for broadband-related permits.
  • Permits must allow the construction techniques chosen by the grant winner.
  • Batch processing of permit requests must be allowed.
  • Grant winners must not be subjected to unnecessarily duplicative or burdensome permitting requirements.

I find these requirements to be odd since NTIA doesn’t have the regulatory authority to specify permitting rules. For the most part, States also don’t control permitting rules and processes, which are left up to local jurisdictions. It’s highly questionable in most States if the Broadband Office can even assert any real influence over permitting practices for State highways.

NTIA has no authority to demand a permitting shot clock. NTIA can’t mandate that localities accept construction plans from grant winners. For example, what if a grant winner wants to bury fiber one foot deep instead of the locally-demanded three-foot depth? There are plenty of localities that won’t allow large-scale construction using trenching with a backhoe to bury fiber. Many local jurisdictions might be skeptical of microtrenching. Most localities will expect BEAD winners to abide by the same rules that apply to other telcos and utilities.

The last bullet point might be the most troubling since nobody knows what a ‘burdensome’ permitting requirement is. Is NTIA planning to intervene in disputes over local permitting rules that a grant winner doesn’t like?

NTIA also wants States to agree that permitting fees must be set at an approximation of actual cost. This is something that Congress could tackle, but any federal law demanding this would be heavily challenged in court.

The requirement that will get the most pushback is the requirement that a grant winner that also owns pole becomes subject to state or FCC pole attachment regulation by accepting the BEAD grant. As a reminder, cooperatives and municipalities are not subject to most pole attachment rules. NRECA, an association of electric cooperatives, wrote this letter to Commerce Secretary Lutnick, warning that many cooperatives will walk away from BEAD awards rather than let themselves be subject to pole attachment regulations.

I have to wonder if any BEAD grant winner will actually complain to NTIA to try to get a State to enforce permitting requirements or fees. I have to think that a State’s reaction to such a complaint would be to put that grant project on hold until the issue is resolved, which could take years and could even run out the five-year BEAD timeline.

The funniest part about the drama related to permitting is that very few, if any, local rural jurisdictions will make it hard for BEAD winners to get permits. Rural counties want better broadband infrastructure, and most counties I know will bend over backward to speed up the process. These odd NTIA rules don’t address the real source of the real permitting problems, which are railroad crossings, bridges, and state and federal lands. I’m honestly scratching my head, wondering why NTIA wrote this guidance. But BEAD has been odd since the beginning, so I guess there is no reason to stop the oddness now.

Satellite Update April 2026

There is so much news and activity in the satellite sector that I find myself gathering a pile of news items each month. Here are some of the highlights from April.

Amazon Entering Direct-to-Device Market. Amazon announced it has signed an agreement to buy Globalstar for $10.8 billion. Globalstar is one of the early leaders in developing technology for providing direct-to-device services to smartphones and other devices. Globalstar currently has about two dozen satellites in orbit.

Jeff Bezos Enters the Space Data Center Race. Jeff Bezos’s rocket company Blue Origin has applied to the FCC to launch a data center in space. The application asks for approval to launch 51,600 satellites that would constitute a huge AI data center. The company argues that a data center in space will complement terrestrial data centers and will give the U.S. the edge in machine learning, autonomous systems, and predictive analytics. The satellites would be placed between 300 and 1,100 miles above Earth, with most of them higher than broadband satellites. This announcement follows a proposal from SpaceX and Elon Musk to put a million data center satellites in space.

Growing Feud Between SpaceX and Amazon Leo. We’re seeing a budding regulatory rivalry between the two American broadband satellite companies. It seems that both SpaceX and Amazon Leo file comments about anything filed by its rival at the FCC. Earlier this month, SpaceX filed comments at the FCC complaining that Amazon Leo is violating the FCC’s orbital space debris mitigation plans. SpaceX claims that Amazon Leo placed several satellites 90 kilometers higher than authorized by the FCC. In a similar complaint, Amazon LEO accused SpaceX of placing satellites too low into its authorized space. Both companies have made negative comments on the other’s plans to create a satellite-based AI data center in space.

Will Starlink Honor BEAD? A group of House Democrats sent a letter to the NTIA Administrator Arielle Roth that raises concerns that SpaceX might not meet its BEAD obligations. The letter was prompted by letters sent by SpaceX to various state broadband offices that said the company doesn’t want to comply with various BEAD reporting requirements. The legislators fear that Starlink will walk away from BEAD, leaving locations with no broadband alternative (although these customers can buy satellite broadband regardless of the BEAD grants).

Failed Satellite Launch. A Blue Origin rocket failed to place a satellite for AST Space Mobile into the proper orbit, and the satellite had to be de-orbited. It was expected that insurance would be used to recover the cost of the lost satellite.

Amazon Leo to Launch Service in Mid-2026? The company said earlier this month that it is still planning to begin offering broadband service by mid-2026. That seems like an extraordinary claim since the company still had around 240 satellites in orbit as of the date of this blog. By comparison, Starlink had almost 900 satellites in service when it began beta tests with customers. At the time, the beta test customers described noticeable gaps in coverage between satellites. What’s most interesting about the announcement is that Amazon has asked the FCC for a two-year delay in meeting the full deployment obligation for its first constellation of over 3,200 satellites.

Environmental Protesters. Residents who live close to SpaceX’s Starbase launch site recently protested during a meeting centered on SpaceX’s planned IPO. The residents of the area complained about the repeated vibrations and pollution caused by regular rocket launches, along with concern about possible fires set in the arid South Texas landscape.

Denied Spectrum Sharing. The FCC recently denied requests from multiple satellite companies that wanted to share in spectrum bands already being used by other entities. As an example of the rejection, SpaceX had asked to share in the 1.5 GHz, 1.6/2.4 GHz, and 2 GHz bands. Other satellite companies had asked to share other spectrum bands. The FCC rejection said these requests were premature and that the agency needs to revise the way it allocates spectrum to accommodate direct-to-device service.

BEAD Rule Changes for Permitting

NTIA issued new General Terms and Conditions dated November 2025 that include dozens of changes to the BEAD rules for recipients, but also changes that impact state Broadband Offices that have wider implications on States. I’m not listing all of the changes here, but there is a great summary of the changes done by the Benton Institute on January 14. This blog will look at the issues related to permitting that have repercussions far outside of the BEAD grant recipients.

In Section 13.D of the revised NTIA Terms and Conditions, State Broadband Offices (SBOs – which are described as Grantees by the NTIA) have a lot of major new obligations related to permitting.

SBOs must “establish procedures to ensure that broadband-related permit applications are promptly accepted, and requests are approved or denied within 90 days”.

In general, SBOs don’t hold a position of authority in State governments to impose rules on anybody other than recipients of grants. Permits for BEAD will mostly mean getting permits to build along existing roads. SBOs are going to have to agree to this requirement, but it’s hard to imagine how an SBO can impose rules for State roads, County roads, Township roads, Municipal roads, roads through Tribal lands, and the biggest challenge – roads passing through federal lands. The goal of getting permits completed within 90 days is great, but it’s hard to think that the small number of people working in SBOs even know the identity of the many permitting authorities in a state, let alone can have any influence, other than perhaps begging, to get BEAD permitting authorities to meet the 90-day deadline. An even bigger challenge is permitting on private land, since a lot of rural roads are privately owned. What can an SBO possibly do to influence private permits?

SBOs must assist “state and local authorities in establishing a single, dedicated point of contact, which has knowledge of the application and review processes, for broadband-related permits.

The key word in this requirement is ‘assist”. Assuming that States even want to go through this process, they vary widely in how this would be achieved. There are States where a Governor might be able to do this. There are States where a State Regulatory Commission might have the authority to tackle this. But in many States, this might require action for a Legislature. What happens in States that don’t undertake the formation of a single, dedicated point of contact?

SBOs must provide technical assistance to permitting agencies to ensure sufficient capacity (e.g., Master Agreement and Consultant Reimbursement Agreement templates, surge support for permit processing, etc.)

This recognizes that local governments often will not have enough staff to quickly process all of the permits required by a BEAD project. SBOs must develop template contracts that can assist a locality if it wants to get help to speed up permitting. But this doesn’t address the issue and time required by local governments when hiring outside vendors. It doesn’t address if a local government has a budget for additional help. Interestingly, this extra funding could come in some states from BED nondeployment funds, assuming there is enough such funding for the purpose.

SBOs must provide “deference to the construction techniques chosen by BEAD Subgrantees (without seeking to influence those decisions), absent any identified safety concerns.

I don’t know if anybody, except perhaps for big ISPs that might have suggested this language to NTIA, really knows what this means, other than allowing construction practices that would otherwise not be allowed by pole owners or by the governments who control the rights-of-way for buried construction. SBOs are being directed to turn their heads to what would normally be non-compliant construction techniques. I’m not sure how pole owners and rights-of-way owners will be expected to comply with this.

SBOs must maximize “streamlined processing through permitting by rule; batch processing of substantially similar permit requests; and waiving or expediting duplicative or burdensome broadband permitting requirements where possible.”

SBOs can certainly promote language that allows batch processing. But, related to the staffing issue addressed earlier, how might a County with little or no staffing be expected to comply with big batches of permits? Even more confounding, are SBOs expected to look at local rules for permitting across the state to identify the ones that are duplicative or burdensome – and what do they do when they identify such rules?

SBOs must follow “FCC rules regarding timelines, rates, terms, and conditions for access to municipally owned poles and conduit for broadband projects – including provisions in the FCC’s rules providing for “one-touch make-ready” and “self-help” – and requiring BEAD Subgrantees that own poles (including cooperatives) to comply with FCC rules across their footprint.”

Around 23 states and D.C. have decided to have their own pole attachment rules, something that has been allowed by federal legislation. While most of these rules are largely the same as the FCC rules, many differ in substantive ways. How can an SBO in a state with its own pole regulation somehow force the State to suddenly follow the FCC rules. The specific requirement cites self-help and one-touch make ready, which are some of rules where States have taken a decidedly different stance than the FCC.

Overall impression of these requirements. SBOs will clearly try to follow these requirements since they must agree to them before they get BEAD funding. But these rules create huge problems for SBOs that don’t have the authority and muscle to impose these rules on the rest of the State and on the many entities that are involved in permitting. To some degree, the severity of these rules, when judged against the practical chance of an SBO accomplishing them, seems like a tool for NTIA to be able to say that any selected State has failed its obligations. I assume that if NTIA tries to withhold funding to a State based on these rules that it will be sued, but that means BEAD goes on hold in that State, to the detriment of the many rural residents relying on better broadband. Interestingly, none of these rules hinders satellite BEAD winners.

BEAD on Hold?

It appears that NTIA missed an important step when it generated the new BEAD rules in June in the BEAD Restructuring Policy Notice. That is the document that changed the scoring of BEAD grants from using a dozen different scoring criteria to choose grant winners to a new method that focused on the character of the proposed technology (priority or not) and the cost per passing.

On December 14, NTIA got a ruling from the GAO that the changes made by NTIA in the Policy Notice are outside of the scope of NTIA’s authority. According to the decision from the GAO, a major change like the one implemented by NTIA requires approval by both Congress and the Comptroller General.

Agencies like NTIA are subject to the Congressional Records Act (CRA), which defines the administrative process that government agencies must follow to change rules. The GAO says that NTIAs Policy Notice implements, interprets, and prescribes law or policy, which triggers provisions of the CRA. The Policy Notice not only affected changes within NTIA of how it administers the BEAD program, but it changed the process of how Eligible Entities (State Broadband Offices) go about seeking funding under the program.

The GAO letter lists the possible ways that NTIA could be exempt from seeking Congressional approval and concluded that none of the exemptions apply to NTIA’s Policy Notice changes. The key trigger for the GAO ruling was that the rule changes created a substantial effect on non-agency parties, meaning States and ISPs.

The conclusion of the GAO is as follows: “The Policy Notice is a rule for purposes of CRA because it meets the definition of a rule under APA and no CRA exception applies. Therefore, the Policy Notice is subject to CRA’s requirement that it be submitted to Congress and the Comptroller General before it can take effect.”

The bottom line of this ruling is that NTIA had no authority to unilaterally change the BEAD rules in such a drastic fashion. The BEAD rules in the IIJA legislation were specific, and the changes NTIA ordered with the Policy Notice were significant enough to require NTIA to seek Congressional approval before making the changes.

This is an interesting twist. In normal times, this would mean that NTIA would have to put BEAD on hold until this is resolved. NTIA would not be able to enforce the changes in the Policy Notice, and if Congress didn’t approve the NTIA changes, the BEAD program would probably reset to the status in June before the Policy Notice. It would mean that all of the changes to grant scoring and the requirements for States to determine priority technologies would be invalid. It would means all tentative grant awards made under the revised rules are invalid. States would probably have to re-score grant applications under the original BEAD rules for selecting winners.

But we don’t live in normal times, and this Administration is currently ignoring the rules of the Congressional Records Act in many other venues and programs. So what does this mean? It may mean nothing, and NTIA might just ignore this GAO decision. This might trigger action from Congress. There has been a lot of unhappiness that the amount of grant awards was trimmed so drastically. This decision certainly gives an actionable reason for anybody who wants to take NTIA to court to halt the BEAD process during litigation. Like everything associated with BEAD, awards made under the new rules are going to be under a cloud, and that makes everybody uncomfortable.

Predictions for 2026

The following are my predictions for 2026. I noticed that after I wrote this, the overall tenor of the list is negative. I’m generally pretty upbeat, but I can’t find fault with any of the predictions.

Federal Regulators Will Continue to Ignore Congress. Federal broadband regulators will continue to ignore Congressional legislation. This past year, the FCC ignored a Congressional edict to lower inmate calling rates. NTIA is ignoring Congress by withholding grant funding for the Digital Equity Act, and is likely to provide little or no funding for BEAD non-deployment funds. Expect similar actions in 2026.

Further Erosion of BEAD. NTIA is not done trying to whittle down the size of BEAD grant funding. The agency already whacked funding with the Benefit of the Bargain rule changes, along with numerous other actions. I expect NTIA to pull more rabbits out of the hat and find more excuses to deny funding to some states for issues like net neutrality, state permitting rules, or state regulation of AI.

Major Spectrum Battles. Congress instructed the FCC to find 800 megahertz of mid-range spectrum for auction. That means potentially reclaiming CBRS spectrum used for rural broadband and 6 GHz spectrum that is just starting to be implemented for WiFi 7. Cellular lobbyists preempted the normal deliberations on spectrum management and got the biggest item on their wish list included in the Big Beautiful Bill. I don’t expect opponents of the spectrum grab to go down without a big fight.

FWA Will Have Another Strong Year. AT&T, T-Mobile, and Verizon just had the biggest quarterly gain of new customers yet, adding over 1 million net new FWA customers in the third quarter of 2025. I predict the three companies will continue to add over 900,000 customers per quarter in 2026, and even more if we see a softening of the economy.

Universal Service Fund Reform Will Stall. Congress is considering badly needed changes to the Universal Service Fund. In the current political chaos in Congress, I predict that a USF bill will never make it through the legislative process.   

Big ISPs Will Have Record Cash Windfalls. There hasn’t been a lot of industry press about the bonus depreciation change included in the Big Beautiful Bill. This allows ISPs to quickly write off current fiber construction, which will cut tax liabilities and generate big cash bonuses for the biggest ISPs in 2026. I predict much of the windfall will be used to buy back stock rather than invest in new networks.

Big ISPs Will All Raise Rates. You might think that in a weakened economy, where the cost of living is the number one issue with the public, ISPs might hold off on rate increases. But the recent $5 across-the-board rate increase by AT&T for fiber will be the first of many significant rate increases during the coming year.

A Federal Regulator Will Declare that the Rural Broadband Gap has Been Solved. I don’t know if it will be the FCC or NTIA, but I expect one of the federal broadband regulators to declare that the rural broadband gap has been solved because of the many grant programs and because everybody can now buy satellite broadband. Arielle Roth already hinted at this when she said in a speech that the mission of BEAD “is nothing less than to close the digital divide once and for all”.

Grants Should Look Forward

State Broadband Offices had to go through a process this year of deciding if various technologies qualify for grant purposes as priority projects. A priority technology must meet the following requirement: Provide broadband service that meets speed, latency, reliability, consistency in quality of service, and related criteria as the Assistant Secretary shall determine; and ensure that the network built by the project can easily scale speeds over time to meet the evolving connectivity needs of households and businesses and support the deployment of 5G, successor wireless technologies, and other advanced services.

NTIA chose a speed of 100/20 Mbps as the metric for meeting the current test of a priority technology. This is convenient, since this was the declared speed that the legislation said a BEAD-funded technology must be able to deliver. Today’s blog asks if that definition is adequate.

One way to consider what the current speed of broadband should be is to look at historical trends. For many years, Cisco issued reports that regularly reported that the demand for speed was growing at roughly 21% per year for residential broadband, and a little faster for business broadband. Cisco and others noted that the demand for broadband speeds was on a relatively straight line back to the early 1980s.

It’s not hard to test the Cisco long-term growth rate. The following table applies a 21% growth rate to the 25/3 Mbps definition of broadband established by the FCC in 2015.This table is somewhat arbitrary since it assumes that broadband demand in 2015 was exactly 25 Mbps – but there was widespread praise of the new definition at that time, other than from ISPs who wanted to stick with the 4/1 Mbps definition. This simple table accurately predicted that we would be talking about the need to increase the definition of broadband to 100 Mbps download around 2022, which is exactly what happened. The FCC did not have a fifth Commissioner at the time and wasn’t able to make the change until March 2024 – but in 2022, the FCC wanted to change the definition of broadband to 100 Mbps download, which was at a 21% compounded annual growth rate from the definition of broadband the FCC had established in 2015.

I can’t think of any fundamental industry changes that would change the historical growth rate in the near future. We’ve certainly seen a big demand to buy faster broadband products. Consider the following chart that starts with the assumption that 100 Mbps was the right definition of broadband in 2022. Growing that number over time by the same 21% results in the following table. What does this table suggest for BEAD and other grant?. Consider the evaluation of Starlink, which is the technology that is closest to meeting or not meeting the needed speed. Ookla released a report in the first quarter of 2025 showing that the median speed on Starlink was 104.71 Mbps download and 14.84 Mbps upload, and that only 17% of Starlink customers in the first quarter fully met the 100/20 Mbps speed threshold.

The table above suggests that the current definition of broadband in 2025 should be something like 177/35 Mbps. It’s debatable if Starlink meets the 100/20 Mbps test today, but it clearly doesn’t meet a test based on the speed demand in 2025.

The BEAD future-looking test is challenging because nobody defined what future-looking means. I can think of two definitions of forward-looking that might make sense. One is to judge what speeds should be delivered when the grant project has been constructed, which for most BEAD projects will be at the end of 2029. The growth chart suggests that the speed for defining broadband in 2029 will be around 380/76 Mbps.

I think a better forward-looking test for a government-sponsored grant should be that a grant-funded network should still be relevant a decade after a grant is awarded. The chart suggests the desired speed should be 1191/238 Mbps in 2035.

Naysayers will argue that the 21% growth in speed demand can’t be sustained. Consider taking a more conservative approach that cuts the historical growth rate in half. That conservative approach would say that a target speed for a grant-funded project would be 195/30 Mbps in 2029 and 345/69 Mbps in 2035. I have nothing to go on except my gut, which tells me that 345/69 Mbps will feel inadequate in 2035.